The resumption of group tours from China to South Korea is anticipated to revitalize South Korea’s inbound visitor traffic and lead to a significant recovery in the number of mass-market foreign customers visiting South Korean casinos. NH Investment & Securities Co Ltd, a brokerage firm, made this prediction in a recent note cited by Business Korea.
Easing of Travel Restrictions
In early August, Chinese authorities announced a relaxation of travel restrictions, allowing Chinese citizens to participate in group tours to more destinations, including South Korea. This marked the return of a customer segment that had been absent for a long period.
Lifting Processing Fees
South Korean authorities recently announced the lifting of processing fees for group visitors arriving in the country, effective until the end of the year. This move is expected to further incentivize Chinese group tours to South Korea.
Positive Impact on South Korean Casinos
NH Investment’s analyst Hazell Lee believes that the return of Chinese group tours will have a positive impact on South Korea’s casino industry, particularly on mass-market visitors. The resumption of group tours is likely to contribute to a sharp recovery in the number of casino visitors.
Challenges in VIP Gaming Segment
While the overall outlook is optimistic, challenges remain in the VIP gaming segment. Chinese VIPs typically travel individually, and the resumption of group tours is not expected to lead to a rapid recovery in Chinese VIP gaming volumes at South Korean casinos.
Chinese Government’s Stance
The Chinese government has been cracking down on its citizens’ overseas casino travel and online betting activities, collectively referred to as “cross-border gambling.” Legislation was amended to outlaw anyone assisting others in such activities, with the law taking effect on March 1, 2021, amid the COVID-19 pandemic.
Favorable Outlook for Paradise Co Ltd
NH Investment favors South Korean foreigner-only casino operator Paradise Co Ltd. The brokerage believes that both the gaming and non-gaming businesses of Paradise Co Ltd will significantly benefit from the resumption of Chinese group tours. The amenities and accessibility of Paradise City, the company’s casino resort complex in Incheon, are expected to attract both group visitors and casino patrons.
South Korea has 17 casinos, with 16 of them exclusively open to foreigners, according to data from the Korea Casino Association. The resumption of Chinese group tours is expected to have a positive impact on the entire South Korean casino industry, providing a much-needed boost to tourism and the economy.